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My industry has seen a huge shakeup from the pandemic. Even as things open back up, it’s not clear how much normalcy will resume — especially with a looming, seemingly inevitable recession.
For now, my job seems secure. The president of the company isn’t overly perturbed and has said there are naturally going to be dips. But depending on how long the current situation lasts, I have real fear for my job.
The most logical thing to do, I suppose, would be to stockpile cash. But for now, I’m holding off and throwing money into retirement in the hopes that things normalize. Of course, I can do this because I have more than a year’s worth of my current expenses among my various savings accounts. Obviously, on an emergency budget, that would stretch further.
Still, I thought it’d be interesting to see where I stand — and give some suggestions for an emergency budget for you guys.
Obviously, if I lost this job, my first job search would be for other at-home customer service positions. But it’s not clear how many jobs that are currently allowing employees to telecommute will actually stay that way once the worst of the danger has passed. So I’m going to assume the worst case scenario: that I have to work out of the house. With my chronic fatigue, I think it’s most likely that I’d be limited to 20 hours per week. The Arizona minimum wage is $12 per hour.
I’d have them not withhold any taxes (other than FICA, obviously) and just pay quarterly to avoid too much coming out of my check. (A nice fat refund is great and all, but it doesn’t help during the year.) At $12/hour, a 20-hour workweek would put me at $876 after taxes.
I’d also ask the tenant for $50 more a month in rent. We’re on month-to-month, so I can raise the rent with one month’s notice. That’s a small enough rise that it shouldn’t be hard for her to swing, and it will help me pad my income a little.
So my total income would be $1,426 per month.
One of the first things I would do is to call the various utilities companies to report my lowered/lack of income.
My electric company offers a 25% discount for low-income customers, which would mean $32.88 less per month. (Electricity is pricey here in Arizona, or maybe it’s just that all the A/C uses a lot of it.)
My gas company offers a 30% discount, but that would be relatively negligible since my bill generally only runs $25-30. Still, any savings is savings.
I couldn’t find any information on the city services (water/sewer/trash) website, so I would need to call and ask about that.
And since I’d no longer need a static IP for work, I could switch from a $79 a month business plan to a $33.99 residential plan.
I guess I would also get rid of Ooma (my landline service). It’s only $5 a month, but it’s not strictly necessary. It would just mean calling a lot of places to switch my number to my cell phone.
I’d also need to start putting away $15 a month in preparation for my yearly Mint Mobile plan.
Category total: $240.53.
How much do you spend on haircuts, makeup, skin creams, etc? Time to cut the beauty products and (for women at least) try to go a little longer between hair cuts. Especially if you have a relatively basic cut, go to Supercuts or a beauty school to keep even that expense low.
Even at only $35 every six weeks, my cut and color is a luxury I probably couldn’t afford. Instead, I’d try coloring my hair it at home, and those kits seem to run around $7-10. I’d still need a haircut ($15 at the beauty school), which I’d stretch to every eight weeks. The other beauty service I get ($40/month) would get nixed.
Category total: $12.50 (assuming I save this month every month for an every-other-month home hair dye and a cut)
I currently put away $150 a month to get ready for my yearly insurance premium. I could call and remove everything but collision coverage. And I would call around to see if I could get a better rate. I’m not sure how much that would save me, and I’d definitely be nervous nixing the comprehensive coverage. So I guess for now assume that I’ll leave this amount where it is.
Category total: $150
If you pay for a radio streaming service, now’s the time to cut it. Most radio stations now have apps, and you’ll just have to deal with the occasional commercial.
While not a streaming service, now’s the time to get rid of any subscription services too: BarkBox, LootCrate, etc.
Also, take a look at all of the television entertainment services you use and make a list of what you watch/have watched on each one to determine whether you use it enough to justify keeping it.
That said, remember that you’ll be staying home more (even without a pandemic), so don’t cut everything unless you’re content with just reading/borrowing videos from the library.
I use both Hulu and Netflix a ton, so I would actually keep both.
Category total: $20.11
First of all, if you have any meal delivery services like Hello Fresh, it probably goes without saying that those need to be cancelled.
Next, apply for food stamps (aka SNAP — Supplemental Nutrition Assistance Program) immediately. This should help cut down your grocery bill. Similarly, it’s more important than ever to meal plan around sales.
Unfortunately, at $1,426 I’m about $100 over the SNAP eligibility limit. So no help there.
My limited income would mean that I’d finally do what so many readers have been urging for a while: start cooking. I’m a picky eater and not much of a cook, so I’d probably be subsisting on around four or five cheap meals that I know. Not fun but necessary.
I’d shoot for $100 a month, but it’s been ages since I’ve had to cook (and cook only cheap meals) and prices have probably gone up a little. So to be a little more realistic let’s call it $150.
Besides SNAP, of course, there are other ways to save or even make money with grocery shopping.
Obviously, coupons are your friend. If you don’t want to get the Sunday paper (usually, the newspaper will offer you specials for just Sunday delivery), at least check out online grocery/drug store coupons. Walgreens will let you load coupons directly to your store card. And any redeemed coupons you print through Swagbucks will net you 10 SB each.
You should also be using Ibotta if you’re not already. (If you haven’t signed up yet, please consider using my referral code: nimjwra.) Before you shop, check the app to see what’s being offered and tap any items you think you’ll buy. Then when you get home, upload the receipt, and you’ll be credited for the items that match your Ibotta list.
Another one to add: FetchRewards. This app gives you 25 points for scanning receipts, plus bonuses if any of your receipt’s items match featured products. You get 2,000 points for your first receipt scan. (Once again, please consider using my referral code if you sign up: PNT6C.)
Finally, there’s ShopKick, which gives you points for scanning items in-store, making purchases and even watching short videos. In some cases, you get kicks just for walking into the store. This one is admittedly slow going, but free stuff is free stuff, right? And you earn 250 points just for signing up. (If you choose to sign up, please consider using my referral code: YAY045135.)
Category total: $150
If you have any lawn maintenance or pest control services, obviously now is the time to DIY.
At present, I have a yard guy come every other month and deal with the weeds that crop up. It’s about $60.
I’d need to start pulling weeds myself and/or spraying them liberally with vinegar (from the dollar store, naturally) since my tenant found that’s a pretty effective weed killer. Honestly, this may be something I start doing in general anyway.
I currently have Orkin come in every other month to the tune of $84.36. Totally worth it as things stand now, since I haven’t seen a single bug in years.
But obviously, this is a luxury I wouldn’t be able to afford. I’d pick up some Raid as necessary, and hope for the best.
I also have a $280ish yearly payment to Orkin for termite control. I have had intermittent problems with termites, so I’d keep this plan and put aside $23 a month to cover it.
Category total: $23
This would mainly be toilet paper, contact lens solution, feminine care products and moisturizers (face and body, not optional in the desert).
I currently have an estimated amount of $40 per month for this, which tends to be a little high most months. While I can’t cut much from this category, I could try a cheaper facial moisturizer (my current one is about $16 and lasts around three to four months, but it looks like there are some for around $6.50), a cheaper body lotion (around $5.50 instead of $11, lasting about two to three months) and cut out the fiber gummies entirely ($23 every other month).
Category total: $25
Obviously, this category gets nixed altogether.
Category total: $0
I currently get auto-billed monthly for $50 by the massage place. (This is a $15 savings over the normal price.) I then get a second massage for $40 each month. With tip, that’s $120 a month. Obviously, I would nix this immediately.
Category total: $0
If you have pet insurance… Well, I’d keep that I think because you never know when something will go wrong, and it’s usually under $20 a month. But it’s your call.
As for pet food, depending on how fast your animal goes through a large bag and how fancy (read: expensive) that food is, you may need to switch to a cheaper brand.
I currently budget $50 a month for this category.
I pay $33.95 for Josie’s Banfield plan. This is a yearly premium broken up over 12 months, so I might still be on the hook for a few months. But if I plead poverty, maybe they’ll take pity on me and cancel immediately.
Obviously, I would still need to buy pet food. She goes through a large bag only about every six months. I suppose I could switch to a cheaper brand, but I know cats can be picky about food. Also, given how long the bag lasts, the difference in price between my current stuff and cheaper brands is only about $3 per month. So I’d probably keep to the current brand.
Category total: $6.50
Well, the good news about being unemployed is that you’re not longer driving to work every day. That could save you a fair amount of money. Obviously, when you go out to run errands, try to group them together to be as efficient as possible.
You can also use an app called GetUpside. I’ve been using it a bit, though I don’t yet have enough to cash out. Get Upside offers cash back on fill-ups. You can open the app and see various stations near you, their prices and how much cash back per gallon you can get. You choose a station and then have a few hours to make the transaction. Afterward you just upload the receipt. (If you do sign up for GetUpside, please consider using my referral code: 2TKBA.)
I don’t currently have a commute, so the bad news is that my gas usage would go up if I had to work outside the home. I currently budget $35, so I’d increase this to $50 and see how my usage goes.
Category total: $50
If you lose your job, you’ll be losing insurance too. While COBRA may be an option, it’s usually a heinously expensive one.
You can apply for Medicaid through your state on the assumption that it may be hard to find a replacement job right about now. But from what I can tell, you have to have assets under $2,000. (Check with your state’s Medicaid office.)
Which leaves many of us with just marketplace plans. Assuming healthcare.gov survives the current Trump administration attempts to kill it in the Supreme Court.
The good news: low-income individuals get subsidies (technically an advance of the tax credit) to help them cover the cost of plans. Those should help make any plans more affordable. At age 39 I had a $400/month plan that had standard copays for doctor visits, therapy and specialist visits without the deductible applying. So if you can get even $100-200 a month in subsidies, a gold plan should be pretty affordable for younger folks.
Alas, healthcare is the biggest line item in my budget. And it causes a quandary to boot.
I currently pay just under $400 a month for Medicare. That would be a huge chunk of my monthly income. It’s true that low-income folks qualify for Medicaid to cover their premiums and prescription costs, but you can only have $4,000 in resources. I obviously don’t qualify for that right now.
That said, when I was kicked off Medicare and had to prove I was still eligible as a working disabled person, it took around 20 months to get back on. If I get off Medicare voluntarily to get on a marketplace plan, I’m not sure if I could ever even get back on Medicare until retirement age. And if my income changes — if, say, I did end up finding a job I could do from home — I could lose the subsidies that make the marketplace a better deal for me.
So I’d have to decide whether to risk it. I guess in the end, financially, I wouldn’t have much choice. But even then there’s no way for me to know what kind of subsidies I’d get or what my new insurance plan’s prescription PCP/specialist copays would be.
So this category is a big ole question mark. Which is unsettling. I guess we’ll call it $400?
Category total: $400
If things are truly dire, you can always contact your lender to see if they’ll do a hardship forbearance. The problem with that option is that they seem to usually require in a balloon payment once payments resume. If you’re just getting back to having a paycheck, you might not be able to swing that.
My mortgage is pretty low at $599.57, but that’s still 42% of my projected post-tax income. Ouch. And I wouldn’t be able to refinance with such a low income.
Category total: $599.57
This is not something I’d recommend discontinuing for obvious reasons. I’m keeping mine until the house is paid off, so that I don’t saddle my heir with debt.
Category total: $52.60
Protection plans are always a toss-up when you’re slashing your budget. In this case, my plan is $30 for the main and guest house units together, and it covers two annual tune-ups. That pretty much pays for the plan itself, so there’s really no reason to discontinue it.
Category total: $30
All in all
Total spending: $1,359.81
Total savings: $710.57
Well, running the numbers provided a lot of anxiety relief. I assumed that, only being able to work 20 hours a week, I’d slowly chip away at savings every single month.
Instead, I now know that (in an average month, at least) my expenses don’t exceed my income. In fact, I’d have about $65 of wiggle room each month.
Obviously, there will be some months where unexpected expenses rear up, like home repair. But at least for the most part, I’m covered. Of course, it would be nice to have more saved each month, but there’s always the chance I could do some freelancing to pad my income.
Knowledge is power (and sometimes a great balm for anxiety), so I highly recommend running your own numbers if you haven’t already.
Do you know your emergency budget? What would be the first things you stop spending on?